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Customer and Channel Surveys
In some markets, particularly in business-to-business markets, research companies ask customers how
much they plan to spend in the coming year on certain products. Have you ever filled out a survey asking
if you intend to buy a car or refrigerator in the coming year? Chances are your answers were part of
someone’s forecast. Similarly, surveys are done for products sold through distributors. Companies then
buy the surveys from the research companies or do their own surveys to use as a starting point for their
forecasting. Surveys are better at estimating market potential than sales potential, however, because
potential buyers are far more likely to know they will buy something—they just don’t know which brand or
model. Surveys can also be relatively costly, particularly when they are commissioned for only one
company.
Sales Force Composite
A sales force composite is a forecast based on estimates of sales in a given time period gathered from
all of a firm’s salespeople. Salespeople have a pretty good idea about how much can be sold in the coming
period of time (especially if they have bonuses riding on those sales). They’ve been calling on their
customers and know when buying decisions will be made.
Estimating the sales for new products or new promotions and pricing strategies will be harder for
salespeople to estimate until they have had some experience selling those products after they have been
introduced, promoted, or repriced. Further, management may not want salespeople to know about new
products or promotions until these are announced to the general public, so this method is not useful in
situations involving new products or promotions. Another limitation reflects salespeople’s natural
optimism. Salespeople tend to be optimistic about what they think they can sell and may overestimate
future sales. Conversely, if the company uses these estimates to set quotas, salespeople are likely to reduce
their estimates to make it easier to achieve quota.
Salespeople are more accurate in their near-term sales estimates, as their customers are not likely to share
plans too far into the future. Consequently, most companies use sales force composites for shorter-range
forecasts in order to more accurately predict their production and inventory requirements. Konica-